Hippocampal atrophy is frequently observed on magnetic resonance images from patients with Alzheimer's disease and persons with mild cognitive impairment. Even in asymptomatic elderly, a small hippocampal volume on magnetic resonance imaging is a risk factor for developing Alzheimer's disease. However, not everyone with a small hippocampus develops dementia. With the increased interest in the use of sequential magnetic resonance images as potential surrogate biomarkers of the disease process, it has also been shown that the rate of hippocampal atrophy is higher in persons with Alzheimer's disease compared to those with mild cognitive impairment and the healthy elderly. Whether a higher rate of hippocampal atrophy also predicts Alzheimer's disease or subtle cognitive decline in non-demented elderly is unknown. We examine these associations in a group of 518 elderly (age 60-90 years, 50% female), taken from the population-based Rotterdam Scan Study. A magnetic resonance imaging examination was performed at baseline in 1995-96 that was repeated in 1999-2000 (in 244 persons) and in 2006 (in 185 persons). Using automated segmentation procedures, we assessed hippocampal volumes on all magnetic resonance imaging scans. All persons were free of dementia at baseline and followed over time for cognitive decline and incident dementia. Persons had four repeated neuropsychological tests at the research centre over a 10-year period. We also continuously monitored the medical records of all 518 participants for incident dementia. During a total follow-up of 4360 person-years, (mean 8.4, range 0.1-11.3), 50 people developed incident dementia (36 had Alzheimer's disease). We found an increased risk to develop incident dementia per standard deviation faster rate of decline in hippocampal volume [left hippocampus 1.6 (95% confidence interval 1.2-2.3, right hippocampus 1.6 (95% confidence interval 1.2-2.1)]. Furthermore, decline in hippocampal volume predicted onset of clinical dementia when corrected for baseline hippocampal volume. In people who remained free of dementia during the whole follow-up period, we found that decline in hippocampal volume paralleled, and preceded, specific decline in delayed word recall. No associations were found in this sample between rate of hippocampal atrophy, Mini Mental State Examination and tests of executive function. Our results suggest that rate of hippocampal atrophy is an early marker of incipient memory decline and dementia, and could be of additional value when compared with a single hippocampal volume measurement as a surrogate biomarker of dementia.